I’m filing for Chapter 7 bankruptcy and I have a rental property under an LLC. Can that property be taken away? I’m in California, and the LLC is solely owned by me. Any insights?
I went through something similar. From what I know, if your LLC is totally separate and you haven’t mixed personal funds with it, you might be able to keep the property. Have you kept the finances separate?
@Emerson
Yeah, I’ve kept it separate. Didn’t realize that could make a difference, though. Thanks for the tip!
@Emerson
I think it matters a lot. Mixing personal funds can be a red flag for the court and could risk them looking at your LLC as personal assets.
In a Chapter 7 bankruptcy, the trustee usually looks at any assets that can pay off debts. So, as long as you’ve been treating the LLC as its own thing, you might be okay. Any personal debts connected to the LLC?
@Renny
No personal debts tied to it, luckily. Just wanted to be sure the property would stay safe.
@Renny
Then you should be fine. Keeping it separate sounds like the best move. Good luck with everything.
I’ve heard if the LLC is seen as your ‘alter ego’ or you haven’t kept it separate enough, they might go after it. Are you the only member of the LLC?
Lilly said:
I’ve heard if the LLC is seen as your ‘alter ego’ or you haven’t kept it separate enough, they might go after it. Are you the only member of the LLC?
Yeah, it’s just me. Is that a problem?
Lilly said:
I’ve heard if the LLC is seen as your ‘alter ego’ or you haven’t kept it separate enough, they might go after it. Are you the only member of the LLC?
Not a problem if you’ve kept it as an independent business. Just make sure it’s all documented properly.
California has strict rules, but if the LLC isn’t tied to personal stuff, it should be fine. FYI, if there’s a personal guarantee on any loans for the property, that might complicate things.
Oli said:
California has strict rules, but if the LLC isn’t tied to personal stuff, it should be fine. FYI, if there’s a personal guarantee on any loans for the property, that might complicate things.
No personal guarantees. Just the LLC on its own. Appreciate the heads up!
Oli said:
California has strict rules, but if the LLC isn’t tied to personal stuff, it should be fine. FYI, if there’s a personal guarantee on any loans for the property, that might complicate things.
Sounds like you’ve covered your bases then. Best of luck with the filing!
I think you’re in a good spot if you kept personal and business funds apart. Just watch out for anything the court might flag as ‘commingling’ funds.
Tan said:
I think you’re in a good spot if you kept personal and business funds apart. Just watch out for anything the court might flag as ‘commingling’ funds.
Thanks, I’ve been pretty careful with that. Good to know it makes a difference.
Tan said:
I think you’re in a good spot if you kept personal and business funds apart. Just watch out for anything the court might flag as ‘commingling’ funds.
Totally does. Just keep everything well-documented and you should be fine.